Thick film magnetic/insulating nanocomposite materials, with significantly reduced core loss, and their manufacture are described. The insulator coated magnetic nanocomposite comprises one or more magnetic components, and an insulating component. The magnetic component comprises nanometer scale particles (about 1 to about 100 nanometers) coated by a thin-layered insulating phase. While the intergrain interaction between the immediate neighboring magnetic nanoparticles separated by the insulating phase provides the desired soft magnetic properties, the insulating material provides high resistivity, which reduces eddy current loss.